diff --git a/lang/en.json b/lang/en.json
index df2bfb5d..cf3a0f22 100755
--- a/lang/en.json
+++ b/lang/en.json
@@ -478,8 +478,8 @@
                     "name": "Impenetrable",
                     "description": "Once per short rest, when you would mark your last Hit Point, you can instead mark a Stress."
                 },
-                "magic": {
-                    "name": "Magic",
+                "magical": {
+                    "name": "Magical",
                     "description": "You can't mark an Armor Slot to reduce physical damage."
                 },
                 "physical": {
diff --git a/module/applications/dialogs/damageReductionDialog.mjs b/module/applications/dialogs/damageReductionDialog.mjs
index 64da237f..7d89eb31 100644
--- a/module/applications/dialogs/damageReductionDialog.mjs
+++ b/module/applications/dialogs/damageReductionDialog.mjs
@@ -3,7 +3,7 @@ import { damageKeyToNumber, getDamageLabel } from '../../helpers/utils.mjs';
 const { ApplicationV2, HandlebarsApplicationMixin } = foundry.applications.api;
 
 export default class DamageReductionDialog extends HandlebarsApplicationMixin(ApplicationV2) {
-    constructor(resolve, reject, actor, damage) {
+    constructor(resolve, reject, actor, damage, damageType) {
         super({});
 
         this.resolve = resolve;
@@ -11,10 +11,13 @@ export default class DamageReductionDialog extends HandlebarsApplicationMixin(Ap
         this.actor = actor;
         this.damage = damage;
 
-        const maxArmorMarks = Math.min(
-            actor.system.armorScore - actor.system.armor.system.marks.value,
-            actor.system.rules.damageReduction.maxArmorMarked.total
-        );
+        const canApplyArmor = actor.system.armorApplicableDamageTypes[damageType];
+        const maxArmorMarks = canApplyArmor
+            ? Math.min(
+                  actor.system.armorScore - actor.system.armor.system.marks.value,
+                  actor.system.rules.damageReduction.maxArmorMarked.total
+              )
+            : 0;
 
         const armor = [...Array(maxArmorMarks).keys()].reduce((acc, _) => {
             acc[foundry.utils.randomID()] = { selected: false };
@@ -129,12 +132,15 @@ export default class DamageReductionDialog extends HandlebarsApplicationMixin(Ap
     getDamageInfo = () => {
         const selectedArmorMarks = Object.values(this.marks.armor).filter(x => x.selected);
         const selectedStressMarks = Object.values(this.marks.stress).filter(x => x.selected);
-        const stressReductions = Object.values(this.availableStressReductions).filter(red => red.selected);
+        const stressReductions = this.availableStressReductions
+            ? Object.values(this.availableStressReductions).filter(red => red.selected)
+            : [];
         const currentMarks =
             this.actor.system.armor.system.marks.value + selectedArmorMarks.length + selectedStressMarks.length;
 
-        const currentDamage =
-            this.damage - selectedArmorMarks.length - selectedStressMarks.length - stressReductions.length;
+        const armorMarkReduction =
+            selectedArmorMarks.length * this.actor.system.rules.damageReduction.increasePerArmorMark;
+        const currentDamage = this.damage - armorMarkReduction - selectedStressMarks.length - stressReductions.length;
 
         return { selectedArmorMarks, selectedStressMarks, stressReductions, currentMarks, currentDamage };
     };
diff --git a/module/applications/sheets/items/armor.mjs b/module/applications/sheets/items/armor.mjs
index bb98c8c3..21fbfea8 100644
--- a/module/applications/sheets/items/armor.mjs
+++ b/module/applications/sheets/items/armor.mjs
@@ -35,7 +35,7 @@ export default class ArmorSheet extends DHBaseItemSheet {
 
         switch (partId) {
             case 'settings':
-                context.features = this.document.system.features.map(x => x.value);
+                context.features = this.document.system.armorFeatures.map(x => x.value);
                 break;
         }
 
@@ -47,6 +47,6 @@ export default class ArmorSheet extends DHBaseItemSheet {
      * @param {Array<Object>} selectedOptions - The currently selected tag objects.
      */
     static async #onFeatureSelect(selectedOptions) {
-        await this.document.update({ 'system.features': selectedOptions.map(x => ({ value: x.value })) });
+        await this.document.update({ 'system.armorFeatures': selectedOptions.map(x => ({ value: x.value })) });
     }
 }
diff --git a/module/config/itemConfig.mjs b/module/config/itemConfig.mjs
index c89bcf2b..cdc8a235 100644
--- a/module/config/itemConfig.mjs
+++ b/module/config/itemConfig.mjs
@@ -190,19 +190,19 @@ export const armorFeatures = {
             }
         ]
     },
-    magic: {
-        label: 'DAGGERHEART.CONFIG.ArmorFeature.magic.name',
-        description: 'DAGGERHEART.CONFIG.ArmorFeature.magic.description',
+    magical: {
+        label: 'DAGGERHEART.CONFIG.ArmorFeature.magical.name',
+        description: 'DAGGERHEART.CONFIG.ArmorFeature.magical.description',
         effects: [
             {
-                name: 'DAGGERHEART.CONFIG.ArmorFeature.magic.name',
-                description: 'DAGGERHEART.CONFIG.ArmorFeature.magic.description',
+                name: 'DAGGERHEART.CONFIG.ArmorFeature.magical.name',
+                description: 'DAGGERHEART.CONFIG.ArmorFeature.magical.description',
                 img: 'icons/magic/defensive/barrier-shield-dome-blue-purple.webp',
                 changes: [
                     {
-                        key: 'system.rules.damageReduction.magic',
+                        key: 'system.rules.damageReduction.magical',
                         mode: 5,
-                        value: '1'
+                        value: 1
                     }
                 ]
             }
@@ -220,7 +220,7 @@ export const armorFeatures = {
                     {
                         key: 'system.rules.damageReduction.physical',
                         mode: 5,
-                        value: '1'
+                        value: 1
                     }
                 ]
             }
diff --git a/module/data/actor/character.mjs b/module/data/actor/character.mjs
index 2f50a0a7..651fbcfd 100644
--- a/module/data/actor/character.mjs
+++ b/module/data/actor/character.mjs
@@ -152,7 +152,15 @@ export default class DhCharacter extends BaseDataActor {
                     initial: null
                 }),
                 weapon: new fields.SchemaField({
+                    /*  Unimplemented 
+                        -> Should remove the lowest damage dice from weapon damage 
+                        -> Reflect this in the chat message somehow so players get feedback that their choice is helping them.
+                    */
                     dropLowestDamageDice: new fields.BooleanField({ initial: false }),
+                    /*  Unimplemented 
+                        -> Should flip any lowest possible dice rolls for weapon damage to highest
+                        -> Reflect this in the chat message somehow so players get feedback that their choice is helping them.
+                    */
                     flipMinDiceValue: new fields.BooleanField({ intial: false })
                 }),
                 runeWard: new fields.BooleanField({ initial: false })
@@ -302,6 +310,13 @@ export default class DhCharacter extends BaseDataActor {
         );
     }
 
+    get armorApplicableDamageTypes() {
+        return {
+            physical: !this.rules.damageReduction.magical,
+            magical: !this.rules.damageReduction.physical
+        };
+    }
+
     static async unequipBeforeEquip(itemToEquip) {
         const primary = this.primaryWeapon,
             secondary = this.secondaryWeapon;
@@ -368,6 +383,7 @@ export default class DhCharacter extends BaseDataActor {
         }
 
         const armor = this.armor;
+        this.armorScore = this.armor ? this.armor.system.baseScore + (this.bonuses.armorScore ?? 0) : 0; // Bonuses to armorScore won't have been applied yet. Need to solve in documentPreparation somehow
         this.damageThresholds = {
             major: armor
                 ? armor.system.baseThresholds.major + this.levelData.level.current
@@ -395,7 +411,6 @@ export default class DhCharacter extends BaseDataActor {
         this.rules.damageReduction.maxArmorMarked.total =
             this.rules.damageReduction.maxArmorMarked.value + this.rules.damageReduction.maxArmorMarked.bonus;
 
-        this.armorScore = this.armor ? this.armor.system.baseScore + (this.bonuses.armorScore ?? 0) : 0;
         this.resources.hitPoints.maxTotal = (this.class.value?.system?.hitPoints ?? 0) + this.resources.hitPoints.bonus;
         this.resources.stress.maxTotal = this.resources.stress.max + this.resources.stress.bonus;
         this.evasion.total = (this.class?.evasion ?? 0) + this.evasion.bonus;
diff --git a/module/data/item/armor.mjs b/module/data/item/armor.mjs
index 4e5a26e6..696a95a2 100644
--- a/module/data/item/armor.mjs
+++ b/module/data/item/armor.mjs
@@ -22,7 +22,7 @@ export default class DHArmor extends BaseDataItem {
             tier: new fields.NumberField({ required: true, integer: true, initial: 1, min: 1 }),
             equipped: new fields.BooleanField({ initial: false }),
             baseScore: new fields.NumberField({ integer: true, initial: 0 }),
-            features: new fields.ArrayField(
+            armorFeatures: new fields.ArrayField(
                 new fields.SchemaField({
                     value: new fields.StringField({
                         required: true,
@@ -44,25 +44,22 @@ export default class DHArmor extends BaseDataItem {
         };
     }
 
-    get featureInfo() {
-        return this.feature ? CONFIG.DH.ITEM.armorFeatures[this.feature] : null;
-    }
-
     async _preUpdate(changes, options, user) {
         const allowed = await super._preUpdate(changes, options, user);
         if (allowed === false) return false;
 
-        if (changes.system.features) {
-            const removed = this.features.filter(x => !changes.system.features.includes(x));
-            const added = changes.system.features.filter(x => !this.features.includes(x));
+        if (changes.system.armorFeatures) {
+            const removed = this.armorFeatures.filter(x => !changes.system.armorFeatures.includes(x));
+            const added = changes.system.armorFeatures.filter(x => !this.armorFeatures.includes(x));
 
+            const effectIds = [];
+            const actionIds = [];
             for (var feature of removed) {
-                for (var effectId of feature.effectIds) {
-                    await this.parent.effects.get(effectId).delete();
-                }
-
-                changes.system.actions = this.actions.filter(x => !feature.actionIds.includes(x._id));
+                effectIds.push(...feature.effectIds);
+                actionIds.push(...feature.actionIds);
             }
+            await this.parent.deleteEmbeddedDocuments('ActiveEffect', effectIds);
+            changes.system.actions = this.actions.filter(x => !actionIds.includes(x._id));
 
             for (var feature of added) {
                 const featureData = armorFeatures[feature.value];
diff --git a/module/documents/actor.mjs b/module/documents/actor.mjs
index 812f7963..eab6d0fc 100644
--- a/module/documents/actor.mjs
+++ b/module/documents/actor.mjs
@@ -3,6 +3,7 @@ import { GMUpdateEvent, socketEvent } from '../systemRegistration/socket.mjs';
 import DamageReductionDialog from '../applications/dialogs/damageReductionDialog.mjs';
 import { LevelOptionType } from '../data/levelTier.mjs';
 import DHFeature from '../data/item/feature.mjs';
+import { damageKeyToNumber, getDamageKey } from '../helpers/utils.mjs';
 
 export default class DhpActor extends Actor {
     async _preCreate(data, options, user) {
@@ -430,12 +431,31 @@ export default class DhpActor extends Actor {
         cls.create(msg.toObject());
     }
 
-    async takeDamage(damage, type) {
+    #canReduceDamage(hpDamage, type) {
+        const availableStress = this.system.resources.stress.maxTotal - this.system.resources.stress.value;
+
+        const canUseArmor =
+            this.system.armor &&
+            this.system.armor.system.marks.value < this.system.armorScore &&
+            this.system.armorApplicableDamageTypes[type];
+        const canUseStress = Object.keys(this.system.rules.damageReduction.stressDamageReduction).reduce((acc, x) => {
+            const rule = this.system.rules.damageReduction.stressDamageReduction[x];
+            if (damageKeyToNumber(x) <= hpDamage) return acc || (rule.enabled && availableStress >= rule.cost);
+            return acc;
+        }, false);
+
+        return canUseArmor || canUseStress;
+    }
+
+    async takeDamage(baseDamage, type) {
         if (this.type === 'companion') {
             await this.modifyResource([{ value: 1, type: 'stress' }]);
             return;
         }
 
+        const flatReduction = this.system.bonuses.damageReduction[type];
+        const damage = Math.max(baseDamage - (flatReduction ?? 0), 0);
+
         const hpDamage =
             damage >= this.system.damageThresholds.severe
                 ? 3
@@ -445,13 +465,9 @@ export default class DhpActor extends Actor {
                     ? 1
                     : 0;
 
-        if (
-            this.type === 'character' &&
-            this.system.armor &&
-            this.system.armor.system.marks.value < this.system.armorScore
-        ) {
+        if (hpDamage && this.type === 'character' && this.#canReduceDamage(hpDamage, type)) {
             new Promise((resolve, reject) => {
-                new DamageReductionDialog(resolve, reject, this, hpDamage).render(true);
+                new DamageReductionDialog(resolve, reject, this, hpDamage, type).render(true);
             })
                 .then(async ({ modifiedDamage, armorSpent, stressSpent }) => {
                     const resources = [
diff --git a/module/helpers/utils.mjs b/module/helpers/utils.mjs
index e719b25e..f284b958 100644
--- a/module/helpers/utils.mjs
+++ b/module/helpers/utils.mjs
@@ -190,6 +190,8 @@ export const tagifyElement = (element, options, onChange, tagifyOptions = {}) =>
     });
 
     tagifyElement.on('add', event => {
+        if (event.detail.data.__isValid === 'not allowed') return;
+
         const input = event.detail.tagify.DOM.originalInput;
         const currentList = input.value ? JSON.parse(input.value) : [];
         onChange([...currentList, event.detail.data], { option: event.detail.data.value, removed: false }, input);
@@ -233,19 +235,23 @@ Roll.replaceFormulaData = function (formula, data = {}, { missing, warn = false
     return nativeReplaceFormulaData(formula, data, { missing, warn });
 };
 
-export const getDamageLabel = damage => {
+export const getDamageKey = damage => {
     switch (damage) {
         case 3:
-            return game.i18n.localize('DAGGERHEART.GENERAL.Damage.severe');
+            return 'severe';
         case 2:
-            return game.i18n.localize('DAGGERHEART.GENERAL.Damage.major');
+            return 'major';
         case 1:
-            return game.i18n.localize('DAGGERHEART.GENERAL.Damage.minor');
+            return 'minor';
         case 0:
-            return game.i18n.localize('DAGGERHEART.GENERAL.Damage.none');
+            return 'none';
     }
 };
 
+export const getDamageLabel = damage => {
+    return game.i18n.localize(`DAGGERHEART.GENERAL.Damage.${getDamageKey(damage)}`);
+};
+
 export const damageKeyToNumber = key => {
     switch (key) {
         case 'severe':